Best Buy Web Fraud was Only Accidental, Company Claims

Employees, Customers Say Best Buy's Goal Was to Confuse by Evan Schuman - eWEEK

As Connecticut state investigators continue to look into the Best Buy dual Web site situation, former Best Buy employees and customers are telling stories that question how accidental some of the confusion was.

The controversy stems from Best Buy giving employees access to two different -- but visually identical -- sites for them to show customers. One of the sites was the public Web site and the other was a full replica of that site but with in-store (typically higher) pricing.

The company's intent behind creating the two sites is crucial to the investigation being conducted by the Connecticut Attorney General's Office, according to a law enforcement source within that department. Were the two sites created as legitimate tools for store associates and the confusion merely a result of insufficient training, or was it a deliberate attempt to perpetrate a fraud on the public?

The fraud issue comes into play if Best Buy employees showed the in-store site to customers and told them that it was the public Web site, in an attempt to get them to back off a price-matching request. Best Buy's policy is that they have to match the price of any sale unless it's labeled a Web-only deal.

Best Buy officially has said that the internal site and the public Web site were both launched many years ago and that, at the time of launch, it made sense to have them look identical to save on design costs. Those executives argue that any confusion of the two sites -- either in the eyes of customers or employees -- is unintentional and there was never any intent to deceive.

Several Best Buy employees, former employees and customers who asked that they not be named said communications inside Best Buy stores were clearly very different.

The first hint as to intent comes from the site appearing on employee screens simply labeled "," according to four sources. If the site was indeed designed to show in-store -- as opposed to online -- pricing, wouldn't it have been labeled in a way to reflect that?

The sources said senior store managers were aware of the two sites and their purposes but typically did not share this information with rank-and-file employees. It's not as though they were told that the intra-store site was identical to the public Web site, but based on the lack of information -- coupled with the name of the site -- they said they assumed it was the public site.

Was Best Buy diabolical or doddering?

What makes this case so challenging, according to sources, is that if Best Buy committed fraud and deceptions, it has done so in a way that makes it very hard to prove and potentially even harder to civilly or criminally prosecute any one individual.

The chain having multiple prices is not the issue and, indeed, is a common and accepted practice. Certainly having a system inside the store -- a kiosk -- that shows employees and/or customers the store (as opposed to the Web) pricing is also not a problem.

What is a problem is if customers are told that they are being shown the company's Web site when in reality they are being shown an internal site and that the intent is to trick them into paying a higher price.

Best Buy concedes that there were two sites and that employees confused them, so the question at issue is one of intent. If a fraud was indeed committed, who is responsible?

Was there criminal intent?

The scenario consistently painted by employees, former employees and customers is one where an employee shows the customer the wrong site. But in many -- although not all -- of the cases, the employee is not aware at the time that it's the wrong site, as they haven't been trained on it.

Without training, isn't an employee likely to think that a link labeled "" is going to bring up the public Web site, especially if it brings up something that looks identical to that Web site? Indeed, without training, it's hard to imagine the untrained store associate could have reasonably concluded anything else.

Without that knowledge, that associate would have had no criminal intent to defraud and is therefore very hard to legally punish. The supervisor (or manager a few levels up) who didn't train that employee properly is the next link. Why did that manager not adequately train that employee? Was it forgetfulness? Was it inadvertent? Or was it some sort of a deliberate plan to defraud?

Assuming the worst -- namely that the manager did have the criminal intent to defraud -- what bad actions did that manager actually commit? He or she merely failed to properly brief an employee. The worst that could be said would be that the manager chose to not have the employee briefed in the hope that the employee would jump to the conclusion that the internal site was in fact and would unknowingly -- but convincingly -- trick the customer into backing off their price-match request.

If a fraud has been committed, it's been set up to cleverly split mens rea (criminal intent) from actus reus (the guilty act), sources said, making prosecution much more difficult.

The stories told by the employees, former employees and customers, however, are so similar and come from so many diverse locations that it's either a series of remarkable coincidences or something more sinister.

One salesperson, who stopped working at Best Buy late last summer and was interviewed March 8, said the confusion was quite deliberate. "Managers and other employees would often encourage us to use the higher price on the internal Web site. It was common knowledge to most people working there that there were two versions of I was one of the only salespeople to consistently find a computer connected to the real Internet and price match using that," he said.

"A few employees actually encouraged others to show customers the intrastore Web site and use that price. All the computers readily accessible on the sales floor were equipped with the intrastore site only and external Web access locked," the former employee continued. "Once there was a computer in the center of the store that had access to the outside Internet and, one day, it was mysteriously removed. Now I realize it was probably because it had access to the real"

Management needs to be held responsible.

One current Best Buy employee told a very similar tale. "I have been with Best Buy for about 10 months now and not one person has mentioned to me that there are two completely different prices on the actual Web and our kiosks. I have even personally encountered this problem with a customer who came in wanting to buy a MP3 player but said it was a different price online. I showed him to the kiosk and the price came up the same as in the store. The customer said he knew for sure it was about $20 cheaper online and said he'd go home and order it. I told him I was sorry for the confusion and he left. About 30 minutes later, he returned with a printout showing the price and also an online receipt for a 'store pick-up.' Being curious, I asked to look at the printout and it had nothing saying it was 'online only.' No one in my 10 months had ever said to me that the kiosk price reflected the in-store price."

That employee said he surveyed other employees and said none of them had been told the sites were different. "So we then talked to the product processing leader and she said she did know about it, and she said that it is like that to keep customers from price matching," the employee said. "I hate to see higher-ups placing blame on sales floor associates when it's our higher-ups withholding nformation. Management needs to be held responsible and not the 18- to 30-year-old kids, like myself, who are just doing what we were told."

In some cases, it's Best Buy's customers who pushed Best Buy employees and their managers to speak candidly about the situation. After one consumer suspected that the "public Web site" he was shown to refute a claimed price match was something else, he asked to speak to a senior manager and was introduced to the store's operations manager.

The operations manager "first tried to tell me that the site in-store was the real Web site, but it had a 24-hour cache so pricing could be a day stale," the customer said. "I then told her I spoke with [a customer service representative] who told me straight out that there is an intranet site within the store, but all employees are trained not to show it to the public. She chuckled and responded, 'Oh, she's not supposed to tell you that.' I then pointed to the employee who misled me the day before -- and who was sitting 20 yards to my left -- and asked [the operations manager], 'Has this employee even been trained to the intrastore site and that it is different than the internet?' She responded, 'No.' Then she said, 'I ain't gonna lie about that.' She then admitted that no employee below herself has knowledge of the intranet."

(Note: Some people outside Best Buy corporate have referred to the internal site -- which Best Buy corporate calls simply a "kiosk" -- as an intranet site. The site was designed for employees to show to consumers visiting the stores, so whether it's a true intranet -- intended only for a closed group of employees, distributors, suppliers and other business partners -- is unclear.)

One former employee who did agree to be identified echoed the theme that employees were simply not told that the on the in-store system was not in fact the public Web site. Micah Hymer spent three years working at the Best Buy in Fort Worth, Texas, and left the store last year.

"Employees were never trained to use that site and it was never mentioned to anyone that there were even multiple sites with different prices," Hymer said. "Supervisors and sales managers would occasionally mention using the Web site in a sinister-type way to boost sales. The employee -- instead of price-matching with the online price could walk over more gullible customers and log into the internal to show the technology-illiterate customer that prices were indeed $199.99. Most customers after seeing this would think they had read the price wrong from their home or think it was a limited-time special they had missed."

Hymer stressed that this was not a formal effort and was certainly a stealth one. "This tactic was never taught by Best Buy management and was only ever discussed by desperate sales managers or supervisors looking to increase revenue on a slow day. That's why most regular employees probably aren't even aware of its existence, as any manager aware of this 'trick' probably would not teach it to anyone but the better salesmen because they don't want to attract negative attention from district management."

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Copyright 2007 Ziff Davis Inc. Content originally published in Ziff Davis Media publications is the copyrighted property of Ziff Davis Media.

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Evan Schuman, eWeek
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